AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2016 (1) TMI 173
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of Rs. 265,77,67,830. In the return of income, the appellant claimed deduction of Rs. 189,70,14,901 under section 80IB(10) of the Incometax Act, 1961 ('the Act') in respect of income derived from various eligible housing projects. 4. In the assessment completed vide order dated 31st December, 2010 under section 143(3) of the Act, the assessing officer assessed the income of the assessee at Rs. 454,03,62,210 against income of Rs. 265,77,67,830 declared by it. In the assessment order, the assessing officer denied the aforesaid deduction claimed under section 80IB(10) of the Act to the extent of Rs. 188,25,94,379. 5. In the first appeal, the learned CIT(A) allowed partial relief in respect of claim u/s 80IB(10) allowing the deduction only on built up residential units consisted in the housing projects. The Learned CIT(A) upheld the order of the Assessing Officer in respect of claim of deduction on unbuilt housing sites i.e. developed plots consisted in the housing projects. Both the parties are in appeal before us against the order of learned CIT(A) for their respective grievances as per Grounds of Appeal. 6. The Revenue has questioned First Appellate Order on the following ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the case, the Learned CIT(Appeals) has erred in holding that the plots and villas included in the projects namely Omaxe City, Sonepat Omaxe City, Lucknow, Omaxe City, Jaipur and Omaxe City, Palwal are separate projects. 8. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in holding that the commercial area in the projects namely Omaxe City, Sonepat, Omaxe City, Lucknow, Omaxe City, Jaipur and Omaxe City, Palwal, which, though, exceeded the limit prescribed in clause (d) of section 80IB (10) of the Income-tax Act, 1961, was a separate unit. 9. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in holding that the transfer of commercial area in the projects namely Omaxe City, Sonepat Omaxe City, Lucknow, Omaxe City, Jaipur and Omaxe City, Palwal, to the group companies was not a mere book entry. 10. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in holding that the project Omaxe Heights, Sonepat and plots and villas included in Omaxe City, Sonepat as district housing projects, when the assessee himself has considered the projects Omaxe City, So....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... housing sites along with construction of all infrastructural facilities and amenities is not 'development and construction of housing project' rather, construction of residential units is must for constituting a housing project. 2. That the Learned CIT(Appeals) erred on facts and in law in confirming charging interest under sec. 234B of the Act ont the revised income of the appellant. 8. The assessee is the developer of large scale housing projects. Some of the projects undertaken by the assessee are Group Housing projects consisting of Residential multi storied buildings and Convenient Shopping/ Commercial complexes. Some of the housing projects undertaken by the assessee are large scale townships consisting of group housing and independent residential units some of which are built up i.e. villas, floors etc. and some are unbuilt i.e. plots. These townships also consist of separate area earmarked for commercial use. Commercial area from group housing projects and township housing projects was transferred to other entities (group companies/ independent entities) without any construction thereon. 9. Out of these large group housing projects/ townships, the assessee c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en if the project as a whole consists of residential units and commercial area having built up area more than the prescribed limit. Department is in appeal before us against the order of learned CIT(A) to the extent of relief allowed to the assessee. 11. In support of the grounds, the learned CIT(DR) has basically placed reliance on the assessment order. He submitted that transfer of commercial area by the assessee was merely a book entry with the sole object to circumvent the provisions of sec. 80IB(10) of the Income-tax Act, 1961. He placed reliance on the decision of Chennai Bench of the ITAT in the case of ACIT vs. Chitra Constrcution Pvt. Ltd. - ITA No. 343/MDS/07 & Ors. (A.Ys. 2003-04 and 2004-05) order dated 28.3.2008 holding that deduction under sec. 80IB(10), provided to 'a project' and if there is violation of condition in any of the residential units no deduction under sec. 80IB(10) can be allowed to the assessee . Similar view has been expressed by the ITAT, Chennai Bench in the case of ACIT vs. Viswas Promoters Pvt. Ltd. in ITA No. 1912/MDS/2007 (A.Y. 2004-05) order dated 13.10.2008. The learned CIT(DR) also cited the decision of Hon'ble Supreme Court in the case of....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... in respect of the profits derived from a housing project which is approved by the local authority. The said section, as per his submission, nowhere mandates that one has to simply go by the license granted by the local authority and examine the satisfaction of conditions with reference to the entire project as approved. It may be appreciated that where the developer proposes to develop a township on a large plot of land, consolidated application is filed with the local authority for approval of the housing project, merely as a matter of administrative convenience. It is also open to the assessee to apply for approval of the housing project on part of the plot of land, rather than filing consolidated application for the entire plot available with the assessee. Once approval is granted by the local authority, the entire project is approved. Merely because consolidated application is filed by the assessee for approval of the housing project, that does not, in his submission, mean that one has to only look at the complete/ consolidated project as such. What is material and important is to examine whether the consolidated license consists of any independent and separate eligible housin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....company(ies). : 12.2 The aforesaid documentary evidences, the Learned AR submitted, clearly establish beyond any reasonable doubt that the commercial area was transferred by the assessee to other company(ies) not merely by way of book entry, as alleged by the assessing officer. It is emphatically reiterated that the decision to transfer the commercial portion was taken by the assessee for business considerations and to strengthen its claim of deduction under section 80IB(10) of the Act. The appellant fails to appreciate as to how the contents of the aforesaid annexure have been understood/ read by the assessing officer as an attempt by the assessee to circumvent provisions of section 80IB(1) of the Act. 12.3 The Learned AR further reiterated that the assessing officer failed to appreciate that commercial area, in any case, was not at all claimed by the assessee to be part of the eligible housing project in respect of which deduction was claimed. The assessing officer had proceeded on the ground that the entire housing project has to be seen with reference to the consolidated approval granted by the local authority and, therefore, the commercial area shall continue to form par....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... "....On the facts admitted by the Revenue, in the projects "Agrini" and "Vajra", there are number of flats which are below 1500 sq.ft., and the relevant built-up area requirement is specified under Section 80IB(10)(c) of the Income Tax Act. Thus, the built-up area in some of the flats in both these projects are in excess of 1500 sq.ft., i.e., 32 flats in Agrini and only one flat in Vajra and that the assessee had not claimed any deduction on this. We hold that the Tribunal is not correct in its view, that by reason of these Units being in excess of 1500 sq.ft., the entire claim of the assessee in respect of these two projects would stand rejected under Section 80IB(10) of the Income Tax Act. Thus, going by the definition of "housing project" under Explanation to Section 80HHBA of the Act as referred to above as the construction of "any building" and the wordings in Section 80IB(10) of the Act, the question of rejection in entirety of the project on account of any one of the blocks not complying with the conditions, does not arise. Even in the case of each one of the blocks, wherever there are flats which satisfied the conditions particularly of the nature stated under Section 80....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Section 80IB of Act, it is not open to the Tribunal to dilute the said Section to grant pro-rata relief." Answering the aforesaid question in the affirmative, their Lordships of the Madras High Court observed as under: "37. Leaving that aspect aside, on a reading of the three clauses, it is clear that in a given case, when the housing project, a 100% residential unit, satisfies other clauses (a) and (b) and the built-up area as given under clause (c) of Section 80-IB(10) of the Act, there could be no difficulty for the Revenue to grant the deduction. The question becomes a little complicated when 100% residential housing project has built-up area of mixed nature. While few of the units may satisfy the criteria of the built-up area of less than 1500 sq.ft., there may be units which have built-up area crossing the limit as specified in clause (c) of Section 80-IB(10) of the Act. In such an event, on a reading of the provision, we hold that the assessee would not be entitled to have the benefit of 100% absolute deduction under Section 80-IB(10) of the Act in respect of the entire project, but would be entitled to pro-rata deduction on the units satisfying the condit....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hal Pradesh High Court considered the possibility of granting the proportionate relief on pro-rata basis to the extent of compliance of the provisions. It is no doubt true that the Section does not provide any such working. Yet, this being a deduction provision and there being no such indication that the conditions have to be cumulatively satisfied in the context of the meaning of a 'housing project' to include residential-cum-commercial complex, we feel, in fairness to the claim of the assessee, the proportionate relief has to be read into the provisions, so that deduction provisions are sustained." 3. In case of Vandana Properties in ITA Nos. 3633/2009 and 4361/2010, the Hon'ble Bombay High Court observed as under: ".....Moreover plain reading of Section 80IB(10) does not even remotely suggest that the plot of land having minimum area of one acre must be vacant. The said section allows deduction to a housing project (subject to fulfilling all other conditions ) constructed on a plot of land having minimum area of one acre and it is immaterial as to whether any other housing projects are existing on the said plot of land or not.." 12.7 In the aforesaid case, t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....we also find support from the order of the Hon'ble Supreme Court in case of Bajaj Tempo Ltd. vs. CIT (supra), wherein it was held that provisions should be interpreted liberally and since in the present case also, the assessee by claiming pro rata income on qualifying units has complied with all the provisions as contained in the said section, in our considered opinion, such claim of the assessee was rightly allowed by the learned CIT(A) by reversing the order of AO." The aforesaid decision of the Tribunal has been upheld by the Hon'ble, Calcutta High Court in IT Appeal No. 453 of 2006 wherein the Hon'ble High Court vide order dated 5th Jan., 2007 held as under: "The appeal is now taken up for hearing and after hearing the learned counsel for the parties and perusing the order passed by the Tribunal, we find that no substantial question of law is involved in this matter. Hence we dismiss the appeal." 12.9 The Special Bench of the Tribunal in the case of Brahma Associates vs. JCIT: 119 ITD 255/ 30 SOT 155 (Pune), while considering the provisions prior to 1.04.2005, held that: (i) Once a housing project consisting of residential and commercial establishments i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....prise v. ITO: 131 ITD 151 (Chennai) (tm) held that the assessee was entitled to pro-rata deduction under section 80IB(10) of the Act in respect of flats having built up area not exceeding 1500 sq ft and not entitled to deduction in respect of those flats having built up area exceeding 1500 sq.ft. On further appeal by Revenue to the Hon'ble High Court, decision of the Tribunal has been affirmed. 12.12 In case of Ansal Housing and Constructions Ltd. ITA No. 1922 and 1923/ Del/2005, Hon'ble Delhi ITAT held that even if some flats exceeded 1000 sq. ft. of builtup area that did not disentitle the assessee to the deduction; a proportionate deduction on flats which exceed the statutory limit of 1000 sq. ft. alone can be disallowed, as held by Calcutta, Delhi and Bangalore Benches of the Tribunal in certain cases. This view of ITAT was affirmed by Hon'ble Delhi High Court in ITA Nos. 480 and 485/201015. It held as under: "For the above reasons, we are of the view that no substantial question of law arises for our consideration in ITA Nos.485/2010 & 480/2010. The orders of the Tribunal are accordingly upheld and the appeals filed by the Revenue are dismissed." 12.13 Pro-rata ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... First category is of various Group housing projects which are multi-storeyed residential towers with commercial space in the projects and another is development of city where land is developed & plotted & sold to customers either as plot or after constructing the villas on such plot. There are also commercial space available in such city. Under the category of claim deduction u/s 80IB (10) multi-storeyed residential tower during the year, the appellant has following projects :- 1. Omaxe Heights, Faridabad 2. Omaxe Heights, Bahadurgarh 3. Omaxe Heights, Sonepat 4. Omaxe Parkwocd. Baddi 5.Omaxe Reviera, Pant Nagai In all the above projects, there are various residential towers. Out of the above five projects, projects at Sr. No. 2,3,4 i.e. Bahadurgarh, Sonepat & Baddi all the residential towers have residential units satisfying the criteria of constructed maximum built up area of 1000 sq. ft. or 1500 sq. ft, as per the requirement of clause (c). For the projects at Sr. No. (1) & (5), some of the residential Towers have flats/residential units having built up area more than the prescribed limit as per clause (c) of Secti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....amenities. All the residential projects are spread over vast area of Land. Therefore, I hold that these residential towers of each project are separate housing projects. Ld. AR argued that Judicial pronouncements are m favour of even allowing deduction on prorata basis in same Tower if some of the flats do not conform to the requirement of clause (c) of Section SOIB (10). He relied upon various decisions of hon'able ITAT cited supra. Apart from honable ITAT decision, Ld. AR has argued that all the decision of high courts are in favour of assessee on the issue of allowing proportionate deduction uls 80lB (l0). He also argued that assessing officer's reliance on honable IT AT, Chennai in the case of Vishwas Promoters Pvt. Ltd. has been reversed by Madras High Court. Ld. AR argued that claim of deduction U/S 80m (l0) as all designated Towers are separate, having separate infrastructure & does not have any residential unit which have constructed area in violation of clause (c) of section 80m (l0). Second issue raised for all the projects by the assessing officer is violation of clause (d) of Section 80m (l0). There has been amendment in clause (d) w.e.f. 01-0....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l all the conditions contained in Section 80m (10) separately. Therefore, I agree with the arguments of Ld. AR that these eligible housing project is separately satisfying the condition of Section 80m (10). The appellant has maintained separate books of accounts for these housing projects & claimed deduction on the profits of these housing project. The assessing officer has relied upon the decision of hon' able ITA T Chennai, in the case of Vishwas promoters Pvt. Ltd. & chitra Construction Pvt. Ltd. cited supra where it has been held that if there is violation of any residential unit having constructed area more than 1000 sq. ft. or 1500 sq. as applicable, the conditions contained in section 80IB are net fulfilled. Ld. AR argued that hon'able Chennai High Court in case of Vishwas promoters Pvt. Ltd. cited supra has reversed the decision of hon' able ITAT, Chennai. The relevant portion of Judgement is reproduced as under :- 11. It is an admitted fact that each one of blocks had separate sanction from the competent authority. Even though the larger area comprised in the name and style of "Agrini" and Vajra" is stated to be the master plan of the project, it....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Act. In the circumstances, we hold that the mere fact that one of the blocks have units exceeding built-up area of 1 500 sq. ft. per se, would not result in nullifying the claim of the assessee for the entire projects. Consequently, in respect of each of the blocks, the assessee is entitled to have the benefit of deduction in respect of residential units satisfying the requirement under Section 80IB (J O)(c) of the Act. In so holding, we also agree with the decision of the Bombay High Court in CIT v. Vandana Properties f20J2} 206 Taxman 584/ 19 taxmann. Cam 316, which was decided by the Bombay High Court on similar lines as in the assessee's case before us. A perusal of above Judgment, it clearly reveals that hon'able High Court has taken and interpreted the definition of housing project u/s 80HHA to arrived at the concept of composite housing project which has eligible & ineligible units in the project for the purpose of Section 80IB (10) for eligible units on proportion basis. The assessing officer has relied on the Judgement of honable Mumbai High Court in the case Brahma Associates (citied supra). Ld. AR argued that the said judgment was delivered in the contex....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ri, Indore 9. PDA Omaxe City, Patiala The assessing officer has denied deduction u/s. 80IB (10) on two grounds. one the approval of the project is for plotted colony & not for housing project &: Secondly commercial area in the said project exceeds the limit prescribed in clause (d) of Section 80B (10). 5.2 All the nine projects numerated above has been approved as plotted housing colony. It was ascertained during the appellate proceeding that the appellant has in some colony only sold the residential plot & in some colony it sold residential plot as well as villas after the construction on the plot. In all the projects, there are commercial area. The assessing officer has denied deduction uls 80IB (10) on the ground that the said deduction is not available to such approved plotted colony. Further, the assessing officer has held that commercial area in these colony far exceeds the prescribed maximum area as per the clause (d) of Section 80IB (10). The assessing officer has denied deduction uls 80IB (10) even on residential units called villas which has constructed area less than 1000 sq. ft. and 1500 sq. ft. as the case may be on prorata basis. 5.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... shows the bifurcation of/he site to various plots, areas earmarked for shops and houses. All these would lead to an irresistible conclusion that the project had the approval of a local authority. and each individual house ,vere only part of a whole. From the above it is clear that plots were allotted to the individuals & construction was carried out by Srivastsa Real Estate Pvt. Ltd., the assessee in question. Honable ITA T allowed deduction as Pro-rata basis for eligible residential units. The facts of the present case is entirely different. Since the appellant in instant case has sold residential plots without any construction on it. There is no question of housing projects. If Plot can be said to be a rcsidentia unit. then how the conditions contained in Section 80IB (10) will be fulfilled. Condition contained in clause (a) i.e. talks about commencement of construction of housing project. Similarly clause (c) specifically refers to ceiling of maximum built up area of a residential unit. If there is no construction, only plot is allotted. how conditions relating to construction of Section 80IB are fulfilled. Considering these facts and circumstances, I am of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... has claimed the deduction U/S 80lE for the entire income on plots and constructed villas. As per my findings in para 5.2.5, income on the sale of plot is not eligible for deduction u/s 80IB Cl 0) of LT. An. Therefore entire profit on these projects cannot be allowed as deduction u/s 80IB (10). The Ld. AR has alternatively argued that deduction for constructed villas may be allowed on prorata basis for constructed villas. Ld. AR has relied upon various Judicial pronouncement. I have considered the plea of Ld. A~ & has given the findings after analyzing Judicial pronouncements that on pro-rata basis, deduction is allowable for eligible housing projects in earlier parts of this order. The facts are similar i.e. constructed villas constitutes eligible housing projects & pro-rata deduction is allowable. Ld. AR specially argued that pro-rata deduction was allowed u/s 80IB (l0) in the case of Sreevastsa Real Estate Ltd. 9 ITR Trib. 808 (ITA T, Chennai) in case of eligible villas constructed on plots. Second issue raised by the assessing officer is violation of clause (d) of Section 80IB (l0). There has been amendment in clause (d) w.e.f. 01-04-2010. Prior to am....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Omaxe City, Sonepat Omaxe Heights, Faridabad 7,85,67,605 Omaxe City, Lucknow 16,55,75,848 Omaxe City, Jaipur 13,50,33,053 Omaxe City, Rohtak 1,91,34,660 Omaxe Heights, Bahadurgarh 16,59,89,596 Omaxe City, Palwal 84,48,158 Omaxe Parkwood-I, Baddi 5,08,14,862 Omaxe Parkwood-II, Chakkan Baddi 2,26,45,075 Omaxe City, Patiala 48,82,09,699 Omaxe Reviera, Pant Nagar, Uttranchal 45,22,38,237 Omaxe City, Mayakheri, Indore 19,17,82,533 Omaxe City, Mayakheri, Indore 6,86,87,350 Total 1,88,25,94,379 12.18. The Assessing Officer has discussed the eligibility of the claimed deduction on projectwise and has denied the claim to the above extent mainly on the basis that out of several conditions laid down under sec. 80IB(10) of the Act, the assessee has not fulfilled the conditions laid down under clause (c) and (d) of section 80IB(10) of the Act. The conditions laid down in clause (c) of the section is that the residential unit should have maximum built up area of 1500 sq. feets as the project is not located within 25 kilometers from the municipal limit of Delhi and 1000 sq. ft. where project fal....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... under section 80IB but housing project is defined in section 80HHBA, which finds its place in the same chapter i.e. chapter VIA- 'Deductions in respect of certain incomes'. Relevant extract is as under: 80HHBA. Deduction in respect of profits and gains from housing projects in certain cases.:..................... Explanation: (a) "housing project" means a project for- (i) the construction of any building, road, bridge or other structure in any part of India; (ii) the execution of such other work (of whatever nature) as may be prescribed; The assessee did undertake construction of roads, other structures like STP, water tanks, bridges etc. in its housing projects. It also undertook construction of residential houses/flats in the housing projects, albeit, in some cases, profits from the same were booked in succeeding years. Perhaps the law makers, in all their wisdom, did not see the need of defining the housing project again in section 80IB as reference could very well be drawn from section 80HHBA, as both the sections fall in the same chapter and are incentive provisions for development of housing projects. In....
X X X X Extracts X X X X
X X X X Extracts X X X X
....our query regarding the definition of housing project, it is clarified that any project which has been approved by a local authority as a housing project should be considered adequate for the purpose of Sections 10(23G) and 80-IB(10)." Hon'ble Mumbai ITAT in case of Laukik Developers vs DCIT 105 ITD 657 has also placed reliance on the aforesaid definition and observed as under: "The clarification of CBDT vide letter dt. 04.05.01 to Maharastra Chamber of Housing Industry clearly states that any project, which is approved by local authority as a "housing project", should be considered adequate for the purpose of Section-10(23G) and 80IB(10) of the Act. This clarification by the CBDT is of no help to the case of the assessee for the reason that the Building Project of the assessee was not approved by the local authority namely KDMC as a "Housing Project" and was in fact approved as a "residential as well as commercial project" by them." Though the aforesaid case was decided against the assesse as his project was approved not as a housing project but as a 'residential and commercial project', but Hon'ble ITAT has reached on this conclusion by placing reliance....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... limit The said clause nowhere mandates construction of residential units as part of the eligible housing project, as a condition precedent to claim deduction; on the contrary, the aforesaid condition only provides maximum built-up area of 1,000/ 1,500 sq. ft.; there is, however, no condition/ stipulation regarding the minimum built up area. (vi) It was admitted by the Learned AR that both development and construction of the housing project are preconditions for claiming deduction under section 80IB(10). However Ld. CIT(A) has interpreted this provision in a very narrow manner. What is specified is development and construction of housing project and not residential units. Construction of the housing project includes construction of roads, boundary walls, overhead tanks, STP, etc. The appellant undertook development and construction of the housing project as under: Construction of sector road, service road and internal circulation road Provision of sewerage system, drainage, STP Electrification of the residential township and provision of street lights. Provision of water supply system • Provision of parks and plantation of trees Provision o....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../ needs and the financial capacity. The critical part of the development/ construction of a residential colony, however, are creation of the basic infrastructure facilities, so as to make any plot of land fit for housing a residential colony. (viii) The intention of the Legislature was to give fillip to the housing development. Reference, in this regard, may also be made to National Urban Housing and Habitat Policy-2005 issued by the Ministry of Housing and Urban Poverty Alleviation, Government of India. Deduction under section 80IB(10) has been provided in order to promote the housing policy of the Government, which not only aims at construction of the dwelling units but providing well planned housing schemes with adequate infrastructure facilities as under: (i) Creation of adequate housing stock both on rental and ownership basis. (ii) Facilitating accelerated supply of serviced land and housing with particular focus to EWS and LIG categories and taking into account the need for development of supporting infrastructure and basic services to all categories. (iii) Facilitate Upgradation of infrastructure of towns and cities and to make these comp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....de order dated 27.01.2014 dismissed the appeal preferred by the assessee in limine, without even admitting and considering/ adjudicating the substantial questions of law raised by the assessee and arising in the appeal. The Hon'ble High Court held that the grant of permission with respect to the aforesaid project which would have made the assessee eligible for exemption, requires not only development of the residential plots, but also construction of the plots, which was admittedly not done. Accordingly, in the opinion of the Hon'ble High Court construction of residential plots or construction of some plots in later years would not qualify the assessee for exemption. The Hon'ble Court further observed that the legal issues were clearly understood by the Tribunal and it is not a case where any interpretation of law was required by the High Court. Accordingly, the Hon'ble High Court proceeded to dismiss the appeal filed by the Appellant holding that no substantial question of law was involved. 13.5 The Learned AR fairly inferred that review petition filed by the Appellant was also dismissed by the Hon'ble High Court vide order dated 14.03.2014. 14. The learned CIT(DR) on the ot....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and in the circumstances of the case, the Learned CIT(Appeals) has erred in allowing deduction u/s. 80IB(10) of the Income-tax Act, 1961 amounting to Rs. 24,92,55,574 in respect of profits derived from group housing scheme GH-03 in housing project, Omaxe Grand Woods, Sec. 93B, Noida. 2. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in holding that the Group housing scheme GH-03 in housing project, Omaxe Grand Woods, Sec. 93B, Noida constitutes a separate housing project despite a single approval by the competent authority in respect of Group housing schemes GH-01, GH-02 & GH-03. 3. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in allowing deduction u/s. 80IB(10) of the Income-tax Act, 1961 amounting to Rs. 16,82,15,090 in respect of profits derived from 24 towers in project Omaxe Palms, Greens, Sec. MU, Gr. Noida where each residential unit is having constructed area less than 1500 sq. ft. 4. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in holding that the 24 towers in project Omaxe Palms Greens, Sec. MU, Gr. Noida where each residenti....
X X X X Extracts X X X X
X X X X Extracts X X X X
....0); the plot area approved for commercial while applying the limit as specified in clause (d) of sec. 80IB(10) instead of actual built up area of shops and other commercial establishments; and the fact that blocks/pockets consisting of residential unit having a built-up area within the limit prescribed under sec. 80IB(10) forms an independent, distinct and separate project which satisfies all the conditions laid down in sec. 80IB(10) of the Act on standalone basis. The Assessing Officer also held that proportionate deduction cannot be allowed under sec. 80IB(10) of the Act. The Learned CIT(Appeals) has allowed the claimed deduction on those residential units complying the conditions laid down under sec. 80IB(10) of the Act on standalone and proportionate basis, which has been questioned by the Revenue before the ITAT vide ground Nos. 3 to 5 of the appeal. 19. The parties have adopted similar arguments on the issues raised in the grounds of the appeal as they have advanced on identical issues hereinabove in the appeal of the department in the case of Omaxe Ltd. for the assessment year 2008-09. 20. We firstly take up ground Nos. 1 and 2 of the appeal preferred by the Revenue to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ain basis of disallowing deduction U/S 80IB (10) is the non fulfilment of condition (c) of Section 801B (l0) which is basically that each residential unit should have built area of less than 1000 sq. ft. in the housing project as the project is within 25 Kms from Delhi. The appellant has developed housing project 'Omaxe Green wood' in Sec 93B consisting of33 Towers (T-l to T-33) under three group housing scheme GHOl, OH-02 & GH-03. Tower T-l to T-12 (12 towers) in original plan which was revised to 11 (T-l to T -11) are named as G H -03 having each flat (housing units) less than 1000 sq. ft. Other Towers T-l3 to T-33(21) which was revised to 14 towers T-12 to T-25 are under Group Housing Scheme 01 & 02 namely GH-O 1 & GH-02, having bigger flats. The appellant company has maintained separate Books of accounts for GH-Ol, GH-02 & OH-03 claimed deduction uls. 80IB in respect of profit derived from GH-03. These facts are not disputed by the assessing officer. The basic issued raised by the assessing officer is that entire projects namely 'Omaxe Greenwood' consisting of 33 Towers is a single housing projects & in towers 13 to 33 built up area of each residential unit is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the decision of hen' able ITA T Chennai, in the case of Vishwas promoters Pvt. Ltd. & Chitra Construction Pvt. Ltd. cited supra where it has been held that if there is violation of any residential unit having constructed area more than 1000 sq. ft. or 1500 sq. as applicable, the conditions contained in section 80IB are not fulfilled. Ld. AR argued that Hon'ble Chennai High Court in case of Vishwas promoters Pvt. Ltd. cited supra has reversed the decision of Hon'ble ITAT, Chennai. The relevant portion of Judgement is reproduced as under :- 11. It is an admitted fact that each one of blocks had separate sanction from the competent authority. Even though the larger area comprised in the name and style of "Agrini" and Vajra" is stated to be the master plan of the project, it is not denied by the Revenue that each block in each of the projects has its own specification; hence had gone for planning approval by the competent planning authority. In the background of this, the question that arises for consideration is as to whether the assessee would lose its claim for deduction in respect of those blocks which satisfied the conditions under Section BOIB (] 0) of the Act by reaso....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lO)(c) of the Act. In so holding, we also agree with the decision of the Bombay High Court in CIT v. Vandana Properties [2012} 206 Taxman 584/ 19 taxmann. Corn 316, which was decided by the Bombay High Court on similar lines as in the assessee's case before us. A perusal of above Judgment, it clearly reveals that Hon'ble High Court has taken and interpreted the definition of housing project U/S 80HHA to arrived at the concept of composite housing project which has eligible & ineligible units in the project for the purpose of Section 80IB (10) for eligible units on proportion basis. The assessing officer has relied on the Judgement of Hon'ble Mumbai High Court in the case Brahma Associates (citied supra). Ld. AR argued that the said judgment was delivered in the context of commercial area & argued that the said judgment has been considered by Hon'ble Madaras High Court in the case of Vishwas Promoters Pvt. Ltd. and after analyzing the Judgement of Mumbai High Court, Madras High Court has delivered the Judgement. Ld. AR further argued that on proportional deduction of eligible housing projects u/s 80lB (10) the Kolkata High Court has concurred the view by n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n, there was separate identifiable plots for group housing GH-01, GH-02 and GH-03 separated by roads. Each group housing scheme was having its own green field and other separate amenities. Sanctioned plan for two bed rooms and bigger flats for different housing schemes were different and approved separately. The assessee has been able to submit a letter from Noida that towers of GH-03 was constructed on separate piece of land which was also supported by the master plan itself that GH-01, GH-02 and GH-03 were own separate pieces of land. We thus concur with the finding of the Learned CIT(Appeals) that common approval does not dilute the independent housing scheme and demarcated in approved plan and independent facilities. Under these circumstances and keeping in view the decision followed by the Learned CIT(Appeals), we are of the view that the Learned CIT(Appeals) has rightly allowed the claimed deduction on prorate basis available with respect to residential unit which satisfied the requirement of maximum constructed area. It has not been disputed in the present case that these eligible residential houses were identifiable cluster of towers, having separate identified land and var....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Officer alleged that the assessee has artificially divided the entire project into two projects - (i) one consisting of flats eligible for deduction under sec. 80IB(10) and the other consisting of bigger flats having more than permissible built up area and not eligible for deduction under sec. 80IB(10) and has stated that it has claimed deduction only in respect of the flats showing built up area of less than the maximum permissible limit. The Assessing Officer observed that the lease deed dated 26.3.2007 between Greater Noida Industrial Development Authority and the assessee in respect of the said plot is with reference to "Project" and not "Projects". The Assessing Officer noted further that the commercial area included in the project is 404.24 sq. mtr. which is much more than the prescribed limit. The assessee tried to meet out all the objections. Regarding approval of the project or projects, the Learned AR adopted similar arguments as advanced by him in relation to the issues raised in ground Nos. 1 and 2 hereinabove. Regarding the exceeding commercial area, it was contended that the commercial area was a part of other projects which was not accepted by the Assessing Officer o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the limit of amended permissible area as per clause (d) of Section 80IB (l0) introduced by finance Act, 2010. Ld. AR has made argued that amendment in clause (d) of Section 80IB (l0) is only clarificatory as it would apply to project started before 31-03-2008. I do not agree with the Ld. AR that the amendment in clause (d) is clarificatory & therefore would apply retrospectively. Third argument of Ld. AR is that the commercial area is not developed & right to develop the same is transferred to other companies & the said transfer is duly intimated to the local authority. The transfer is not a were book entry as claimed by the assessing officer. In my view this fact is not material for examining the allowability of deduction u/s 80IB (10). However as I have held earlier that these eligible Towers are separate housing projects, therefore deduction u/s 80IB (10) is available. In view of the above, I allow deduction u/s 80IB (l0) in respect of profit of the eligible housing projects U/S 80IB (l0). I, accordingly allow the deduction U/S 80IB (l0) on the project. As a result, this ground of appeal is allowed". 23.2 On perusal of the orders of the authorities below, we find th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....same as separate housing project (Ground Nos. 1 and 2) and secondly holding that 24- towers in project Omaxe Palm Greens - Plot No. GH-02 - Sector MU, Greater Noida having each residential unit constructed area less than 1500 sq. fts. are separate housing projects (Ground Nos. 3 & 4). For a ready reference, the grounds of the appeal for the assessment year 2007-08 are being reproduced hereunder: 1. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in holding that the project GH-03 constitute a separate housing project. 2. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in allowing deduction u/s. 80IB(10) of the Income-tax Act, 1961 amounting to Rs. 29,14,11,809 in respect of income arising from project GH-03. 3. On the facts and in the circumstances of the case, the Learned CIT(Appeals) has erred in holding that the 24 towers in project Omaxe Palms Greens, Plot No. GH-02, Sec.-MU, Gr. Noida where each residential unit is having constructed area less than 1500 sq. ft. are separate housing project. 4. On the facts and in the circumstances of the case, the Learned CIT(Appeals)....